The ACIT(OSD)., Circle-5, Ahmedabad V. Precision Technofab & Engineering Ltd., Ahmedabad

ITA 1240/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80313 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 02-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2011
• Court: TRIBUNAL
• Department Lawyers: V K SINGH

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , , , 0 00 0 0 00 0 , , , , !' !' !' !' ! # ! # ! # ! # BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER 0 00 0/ // / ITA NO. 1240/AHD/2011 % &% % &% % &% % &%/ // / ASSESSMENT YEAR 2006-07 ACIT (OSD), CIRCLE-5, AHMEDABAD. VS M/S. PRECISION TECHNOFAB & ENGINEERING LTD. PAN: AACP6754D '(/ APPELLANT )*'( / RESPONDENT REVENUE BY : SHRI V.K. SINGH, SR. DR ASSESSEE(S) BY : SHRI S.N. SOPARKAR WITH URVASHI SHODHAN, AR + , -'/ // / DATE OF HEARING : 02/09/2014 ./& , -' / DATE OF PRONOUNCEMENT: 05/09/2014 !0 !0 !0 !0/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XI, AHMEDABAD DATED 22.02.2011. 2. THE ONLY GROUND OF APPEAL TAKEN BY THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE U/S. 40(A)(IA) OF RS 18,7 0,653/-. ITA NO. 1240/A/2011 M/S. PRECISION TECHNOFAB & ENGINEERING LTD. AY 2006-07 - 2 - 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE FOLLOWING PAYMENTS ON WHICH TDS W AS DEDUCTED DURING THE MONTH OF MARCH 2006 AND PAID BEFORE THE DUE DA TE SPECIFIED IN SECTION 139(1) FOR FILING RETURN OF INCOME I.E. 31 ST OCTOBER 2006: NAME OF PARTY TYPE OF PAYMENT PAYMENT/ CREDIT DATE PAYMENT/ CREDIT AMOUNT T.D.S. AMOUNT DATE OF TDS PAID AMBA TOOLS SUB-CONTRACTOR 26.03.06 700 16 12.04.06 D.H. YADAV SUB-CONTRACTOR 07.02.06 200000 2250 12.04.06 DIAMOND MACHINERY WORK SUB-CONTRACTOR 25.02.06 40570 913 07.04.06 G.CHANDRASHEKAR BROKERAGE 17.08.05 9000 459 12.04.06 G.CHANDRASHEKAR BROKERAGE 04.02.06 9626 217 0.7.04.06 KISHORE SRIVASTAVA PROFESSIONAL FEE 17.01.06 50000 2805 12.04.06 KISHORE SRIVASTAVA PROFESSIONAL FEE 17.01.06 50000 2805 12.04.06 L.C. JHA SUB-CONTRACTOR 31.03.06 226233 2545 12.04.06 L.C. JHA SUB-CONTRACTOR 31.03.06 6880 155 12.04.06 PTPL(JOBWORK) CONTRACTOR 05.03.06 75000 1688 12.04.06 PTPL(JOBWORK) CONTRACTOR 12.03.06 100000 2250 12.04.06 PTPL(JOBWORK) CONTRACTOR 19.03.06 100000 2250 12.04.06 PTPL(JOBWORK) CONTRACTOR 27.03.06 100000 2250 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 10.02.06 19000 238 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 10.02.06 13800 163 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 10.02.06 10000 125 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 10.02.06 5000 63 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 10.02.06 30000 375 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 10.02.06 10000 125 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 10.02.06 10000 125 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 01.03.06 30000 375 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 13.03.06 30000 375 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 29.03.06 6000 135 12.04.06 SARJAN & TEJRAJ SINGH CONTRACTOR 31.03.06 42438 955 12.04.06 ITA NO. 1240/A/2011 M/S. PRECISION TECHNOFAB & ENGINEERING LTD. AY 2006-07 - 3 - SHIVALIK ENTERPRISER TECHNICAL SERVICE 28.02.06 26150 588 12.04.06 SHIVALIK ENTERPRISER TECHNICAL SERVICE 16.03.06 26150 588 12.04.06 SHIVALIK ENTERPRISER TECHNICAL SERVICE 28.02.06 26150 588 12.04.06 SHRI KRISHNA TRANSPORT CONTRACTOR 04.03.06 48760 1097 12.04.06 SRINIVAS DRONAMRAJU RENT 04.09.05 18000 2754 12.04.06 SRINIVAS DRONAMRAJU RENT 04.10.05 18000 2754 12.04.06 SRINIVAS DRONAMRAJU RENT 04.09.05 18000 2754 12.04.06 SRINIVAS DRONAMRAJU RENT 04.12.05 18000 2754 12.04.06 SRINIVAS DRONAMRAJU RENT 04.01.06 18000 2754 12.04.06 SRINIVAS DRONAMRAJU RENT 04.02.05 18000 2754 12.04.06 SRINIVAS DRONAMRAJU RENT 04.09.05 18000 2754 12.04.06 JJ.K.MUNSHI & ASSOCIATES PROF. FEES 18.02.06 10000 550 12.04.06 VISHNUBHAI MISTRY CONTRACTOR 02.04.05 17000 383 12.04.06 VISHNUBHAI MISTRY CONTRACTOR 28.03.06 23600 531 12.04.06 VISHNUBHAI MISTRY CONTRACTOR 14.02.06 101690 2288 12.04.06 VISHNUBHAI MISTRY CONTRACTOR 10.04.05 124703 2806 12.04.06 VISHNUBHAI MISTRY CONTRACTOR 31.03.06 123562 2780 12.04.06 KPMG PROF. FEES 29.04.05 52495 2756 12.04.06 AMIT B VIBHAKAR INTEREST PAID 31.03.06 168041 17140 12.04.06 BHASKAR P. VIBHAKAR INTEREST PAID 31.03.06 145287 14819 12.04.06 MINAXI B VIBHAKAR INTEREST PAID 31.03.06 218269 22263 12.04.06 NALIN P VIBHAKAR INTEREST PAID 31.03.06 3921 400 12.04.06 PRECISION TECHNOFAB INTEREST PAID 31.03.06 99087 22235 12.04.06 UNISION METAL INTEREST INTEREST 31.03.06 127872 28694 12.04.06 2642984 THE ASSESSING OFFICER OBSERVED THAT THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT CREDITED IN THE LAST MONTH OF THE YEAR WAS NOT VERIFIABLE. FURTHER, WITH RESPECT TO THE PAYMENT, THE ASSESSEE FAILED TO PROVE ITS POINT THAT THE BILLS WERE FINALIZED AND F ORWARDED ONLY IN THE MONTH ITA NO. 1240/A/2011 M/S. PRECISION TECHNOFAB & ENGINEERING LTD. AY 2006-07 - 4 - OF MARCH 2006. HENCE, THE ASSESSING OFFICER DISAL LOWED DEDUCTION U/S. 40(A)(IA) OF RS 18,70,653/-. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) HELD AS UNDER: 3. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A .R. OF THE APPELLANT AND THE OBSERVATION OF THE ASSESSING OFFI CER IN THE ASSESSMENT ORDER. THE SPECIFIC DIRECTIONS OF THE T RIBUNAL ARE TO CONSIDER THE EFFECT OF RULE 30 AND THE PROVISO TO S EC. 40(A) INTRODUCED W.E.F. 01-04-2005. AS SEEN FROM THE ASSE SSMENT ORDER TDS CORRESPONDING TO EXPENDITURE OF RS 18,70, 653/- WAS MADE IN MARCH 2006. TDS WAS REMITTED BEFORE THE D UE DATE OF FILING OF ROI. THE BALANCE AMOUNT OF RS 7,72,331/- WAS HELD BY COMMISSIONER OF INCOME TAX(A) AS NOT ALLOWABLE IN T HE FIRST ROUND OF APPELLATE PROCEEDINGS. APPELLANT DID NOT C ONTEST IT BEFORE THE TRIBUNAL. HENCE, THE SAID SUM IS NOT SU BJECT MATTER OF THIS APPEAL. AS CONTENDED BY THE LEARNED A.R., RULE 30 PRESCRIBES DATES FOR PAYMENT OF TDS, FAILING WHICH LIABILITY TO INTEREST/PENALTY ARISES. IN THE INSTANT CASE THERE IS NO DISPUTING THE FACT THAT THERE IS DELAY IN REMITTANCE OF TDS. 3.1. ALLOWABILITY OF EXPENDITURE IS GOVERNED BY SEC . 40(1)(IA). SEC. 40(A)(IA)(BA) SPECIFIES THAT IF THE TDS MADE I N THE LAST MONTH OF THE PREVIOUS YEAR IS PAID BEFORE THE DUE D ATE U/S. 139(1), THE CORRESPONDING EXPENDITURE IS ALLOWABLE. PROVISO TO SEC. 40(A) SPEAKS OF (I) TDS MADE IN LAST MONTH BUT PAID AFTER DUE DATE U/S. 139(1) AND (II) TDS MADE IN OTHER MON THS OF THE PREVIOUS YEAR AND PAID AFTER THE PREVIOUS YEAR. SAI D PROVISO IS NOT APPLICABLE TO THE FACTS OF THE CASE. 3.1.2.HENCE A.O. IS DIRECTED TO ALLOW THE EXPENDITU RE OF RS. 18,70,653/-. DISALLOWANCE OF BALANCE EXPENDITURE OF RS. 7,72,331/-, WHICH WAS NOT CONTESTED BY THE APPELLAN T BEFORE TRIBUNAL STANDS UPHELD. 5. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDER OF THE ASSESSING OFFICER WHEREAS THE AUTHORIZED REPRESENTA TIVE OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPE ALS) HAS RIGHTLY DELETED THE DISALLOWANCE OF RS 18,70,653/- AS HE FO UND THAT THE PAYMENT FOR TDS WAS MADE BY THE ASSESSEE IN THE MONTH OF APRIL, 2006 I.E. IMMEDIATELY ITA NO. 1240/A/2011 M/S. PRECISION TECHNOFAB & ENGINEERING LTD. AY 2006-07 - 5 - AFTER CLOSING OF THE FINANCIAL YEAR ENDED ON 31.03. 2006 WHICH WAS BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME OF THE ASSES SEE U/S. 139(1) OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, EXPENDITURE OF RS 18,70,653/- WAS DISALLOWED BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA). ACCO RDING TO THE ASSESSING OFFICER, THE ITDS RELEVANT TO THE AFORESAID EXPENDI TURE WAS PAID ON VARIOUS DATES IN APRIL, 2006 I.E. AFTER THE END OF THE RELE VANT PREVIOUS YEAR BUT WELL BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U /S. 139(1) OF THE ACT. THE GROUND FOR MAKING DISALLOWANCE WAS THAT THE ASSESSI NG OFFICER COULD NOT VERIFY THAT THE ITDS ON THE RELEVANT EXPENDITURE WA S DEDUCTIBLE IN THE LAST MONTH OF THE PREVIOUS YEAR I.E. MARCH 2006. IN OT HER WORDS, ACCORDING TO THE ASSESSING OFFICER, THE ITDS MIGHT BE DEDUCTIBLE BEFORE THE LAST MONTH OF THE PREVIOUS YEAR AND THEREFORE OUGHT TO HAVE BEEN PAID BY THE END OF THE RELEVANT PREVIOUS YEAR. 7. IN THE IMPUGNED ORDER, THE COMMISSIONER OF INCO ME TAX (APPEALS) ALLOWED THE DEDUCTION FINDING THAT THE IT DS WAS PAID WELL BEFORE THE DUE DATE SPECIFIED U/S. 139(1) OF THE ACT. 8. IN VIEW OF THE ABOVE FACTS, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN VIEW OF THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATIONS WHEREIN IT WAS HELD BY THE HONBLE CALCUTTA HIGH COURT VIDE OR DER DATED 23 RD NOVEMBER 2011 IN ITA NO. 302 OF 2011, GA NO. 3200/ 2011 THAT THE AMENDMENT BROUGHT IN FINANCE ACT, 2010 THAT IF THE TDS IS DEPOSITED BEFORE DUE DATE OF FILING OF RETURN, THE DISALLOWANCE UNDE R SECTION 40(A)(IA) SHALL NOT BE MADE, WAS RETROSPECTIVE IN NATURE. THUS, IF THE AMOUNT OF TDS DEDUCTED IN ANY MONTH OF THE RELEVANT PREVIOUS YEAR IS PAID BEFORE THE DUE DATE OF FURNISHING OF RETURN OF INCOME U/S. 139(1), THEN THE CORRESPONDING ITA NO. 1240/A/2011 M/S. PRECISION TECHNOFAB & ENGINEERING LTD. AY 2006-07 - 6 - EXPENDITURE IS NOT DISALLOWABLE U/S. 40(A)(IA) OF T HE ACT. THEREFORE, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 5 TH OF SEPTEMBER, 2014 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 05/09/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY !0 , )1 2!1& !0 , )1 2!1& !0 , )1 2!1& !0 , )1 2!1&/ COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. 3 / CONCERNED CIT 4. 3() / THE CIT(A)-III, AHMEDABAD 5. 167 ) , , / DR, ITAT, AHMEDABAD 6. 78% 9+ / GUARD FILE. !0 !0 !0 !0 / BY ORDER, : :: :/ // / ; ; ; ; ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD